Time for Commerzbank to Deliver

By Ulrike Dauer

At an agitated annual general meeting Wednesday, Commerzbank shareholders expressed their dissatisfaction with the bank’s management for removing the cap on executive pay for 2012 prior to actually resuming a dividend payout, which the bank only envisages for the 2013 business year.

The bank last paid a dividend for 2007, of €1 a share. The cap–in place since 2008–had limited annual salaries of management board members including the chief executive to €500,000 ($634,200).

Now that the cap has been removed, management board members are entitled to an annual salary of €750,000 when counting the fixed portion only. Chief Executive Martin Blessing is entitled to a fixed salary of €1.3 million, more than twice what he made last year, plus bonuses.

Meanwhile shareholders, who suffered substantial dilution of their shareholdings due to various capital measures in recent years, are still awaiting their dividend compensation — and waiting for the bank to reach previously announced profit goals. The share has lost some 94% since the last dividend payment after the 2008 annual general meeting.

“The timing of the cap removal couldn’t have been worse,” said shareholder representative Wolfgang Aleff of the Gesellschaft für Wertpapierinteressen.

Klaus Nieding, who represents the DSW retail shareholder group, was critical that Commerzbank as recently as last year said it planned to resume a dividend payment in 2012. It also said then it still expects an operating profit above €4 billion this year.

Those announcements, however, were made prior to the European Banking Authority’s stress tests that required all banks to meet a 9% core tier 1 capital ratio by June 30, 2012, and identified a €5.3 billion capital gap the bank needed to fill to meet that requirement.

“Now reaching those goals seems to be delayed to 2015 or even 2020,” Mr. Nieding said. “It might not be a bad idea for the bank to put away the road map, it might need a navigation device instead,” he added, referring to the bank’s previous “road map” targets.

The bank is further reducing risk-weighted assets and focussing on profitable business. It aims to enhance profitability and substantially boost growth in the core businesses in Germany and Poland, Mr. Blessing told shareholders.

Nevertheless, the bank still has substantial restructuring to do in various places. Under a recent agreement reached with the European Commission, the bank will integrate a small core of its Eurohypo property financing unit and wind down the unit’s noncore assets, equivalent to 80% of the unit’s balance-sheet volume of €166 billion. The name Eurohypo will cease to exist.

It has to transfer about €130 billion of noncore activities in a fully separated “bad bank” that won’t be allowed to write new business but will concentrate on the orderly wind down over time. The bad bank will contain almost €100 billion of sovereign bonds, which were held by Eurohypo’s long-time loss-making public financing unit. The facility will also hold noncore market commercial real estate business with a volume of €31 billion as the bank has to withdraw from 29 of 33 countries.

It is also reducing noncore assets such as in ship financing, public finance and commercial real-estate financing. In July, that part of the commercial real-estate businesses that will be continued –in Germany, the U.K., France and Poland– will be bundled together with core assets in ship financing and asset management and leasing, in a new segment Real Estate and Ship Finance.

The bank will now have to prove it is delivering.

“A Commerzbank share is now less expensive than a litre gasoline. However, a litre gasoline will get you somewhere. I have my doubts that Commerzbank is getting you anywhere,” said one shareholder.

Comments (2 of 2)

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In addition to, would you prefer that churches ignore all kinds of public insurance policies. Lots of the first abolitionist organizations have been churches -the Quakers, for example. Many anti-poverty, anti-struggle, anti-communist...decide a coverage and you'll discover a church supporting it or opposing it. Just as you can see any number of secular organizations supporting or opposing. So church buildings ought to just sit down and shut up. I see where liberty lies, in the trash heap.

I wasn't attracted to ANYONE as a baby. Sorry to say this about your friend however his molestation most likely occurred earlier than he was interested in anyone as effectively. Kids get molested... and children that had been going to develop up to be gay anyway get molested too. As a matter of reality since round one in ten individuals are homosexual I am assuming that means that one in ten kids who are molested had been born gay too.

Romney helps a constitutional amendment to ban identical-sex marriage. But along with his focus on the economy, he has not seemed anxious to engage on the problem—and faces a significant determination on whether to highlight his opposition to what proponents name marriage equality. Obama spoke about his help for homosexual marriage in deeply private terms, saying his young daughters, Malia and Sasha, have pals whose dad and mom are identical-sex couples. Acknowledging that his help for identical-sex marriage might rankle non secular conservatives, Obama stated he thinks about his religion partially by the prism of the Golden Rule - treating others the way you'll wish to be handled.

That's definitely not what Tony Perkins of the Family Research Council, which advocates for a Christian organization that advocates for a conventional family unit, told NPR's Liz Halloran. In accordance with the latest Pew Analysis Heart for the Individuals & the Press, People are virtually evenly divided on the difficulty. This coverage shift from the president was additionally made more dramatic due to yesterday's vote in North Carolina, which modified the structure making all gay unions illegal.

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These causes they are donating to most likely do stuff like make signs, put out advertisements, etc. all giving the reason why gay marriage is bad. They are not making guidelines for folks, they're giving individuals trigger to leap on one boat or the other. Just open your eyes and look at all of the anti-this, pro-that crap about each subject, and you may see why this is similar (Who cares? These organizations haven't got the ability to stop gays from marrying. They lobby against it. Only the government has the power).

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2:34 am December 11, 2012

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